Star Players, Payroll Distribution, and Major League Baseball Attendance

Abstract

The purpose of this paper was to develop a demand model that determined if a relationship existed between the variation in team payroll and spectator attendance at Major League Baseball (MLB) games. A secondary purpose was to determine if the presence of star players was related to MLB attendance. Our findings suggest that if a star player does not contribute to an increase in the team's on-field performance, the player has little influence on attendance. Additionally, the assumption that an increased team payroll will result in additional attendance is usually correct, yet incomplete. While the relationship between a team's payroll and attendance is positive, the relationship between team payroll variation and attendance is negative. Our findings suggest that, in order to maximize attendance, Major League teams should not devote a high percentage of their salary budget to one or two star players. Instead, teams should distribute their payroll evenly across the 25-man roster. This paper also confirms previous studies that determined that attendance is positively related to recent playoff success and new facilities.

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